The world’s financial regulators are in full panic mode. That is to be expected. Banks have failed; wholesale money markets have frozen; financial systems have flirted with collapse. These are the terrible challenges of today.

But at the same time, the world’s banks, financial regulators and governments need to devise a new system for regulating banks tomorrow. Two things are clear. The crisis exposed an enormous failure in risk management in the private sector and an equally large regulatory failure across swathes of the financial system. And the consequence is more regulation to come.